Iraq’s unraveling would be good for oil

Opinion: Most of the oil is in Kurdish, Shiite lands

AmotzAsa-El

A general view of Baiji oil refinery, north of Baghdad, in this 2009 file photo.

Iraq, once the civilized world’s commercial heartbeat and intellectual lighthouse, has become the jihadist international’s big game.

With Mosul, the country’s second-largest city, fallen amid reports of mass executions while embassies in Baghdad fortify and consulates in Basra evacuate — there is a general feeling in Western capitals that we are back in the last days of South Vietnam.

The analogies are not completely unfounded. Now as then, a U.S.-built army is melting as a U.S.-backed government runs for cover while its enemies shape events. And since Washington’s political structure has come unstuck, many fear that so will Iraq’s steadily recovering energy industry.

Well it won’t.

A geographic straightjacket

The Sunni insurgency, while savage, has a cause. Iraq’s Shiite majority abused the American-sponsored democratic process, discriminating against the Sunni minority in budgets and appointments. Numbering roughly one-third of some 32 million Iraqis, the Sunnis would not be swept under the rug.

The ISIS insurgency wants to create a Sunni state in areas of Syria and Iraq.

Moreover, with the Sunnis to their west, in Syria, they number some 25 million people whose shared faith, ethnicity, language, and land indeed render their separation by an international border artificial. The insurgency’s quest to unite these populations is, therefore, not farfetched. Indeed, the biblical land of Aram roughly overlapped these areas.

Such a state, should it emerge, would end an era shaped by European statesmen who stuffed the social hodgepodges of Iraq, Syria, and Lebanon into the states that are now falling apart.

Talk of the Sunni insurgency fully taking over Iraq assumes Europe’s mapping can be sustained, and also ignores the geopolitical straightjacket in which a Sunni Iraq would live.

Politically, the new Sunni state would be surrounded by implacable enemies. To its east will crouch 20 million Arab Shiites, to its north 7 million non-Arab Kurds and to its west 3 million Syrian Alawites and a million Lebanese Shiites, all of whom will comprise the new state’s immediate ring of hostility.

Beyond it will lurk Shiite Iran in the east, and non-Arab Turkey to the north, and beyond them will loom all the superpowers, including Russia, due to its ironclad alliance with the Assad regime, and China, due to its intensifying friction with Sunni Islamism.

Moreover, ISIS’s religious zeal is unnerving nearby Jordan, which is actually ruled by fellow Sunni Arabs, but Western-educated ones for whom the fundamentalist charge to their north is a cultural anathema and a strategic threat.

Then there is topography. ISIS’s immediate enemies sit atop mountains that surround the flatlands that Iraq’s and Syria’s Sunnis inhabit. Then there is weaponry. Turkey, Iran, Syria, and Jordan have the fighter jets, artillery and tanks that ISIS lacks, and they would not hesitate to use them if that is what circumstances will demand.

And worst of all for ISIS, Iraq’s oil wealth is mainly in the Shiite south and the Kurdish north.

ISIS can storm and bully towns in the Sunni flatlands, but should it charge the Kurdish or Shiite areas it will discover that history’s dustbin has sucked not only colonial Europe’s idea of Iraq, but also Saddam Hussein’s, whereby the Sunnis imposed themselves on the Shiites, thanks to Russian arms, Iranian weakness, and Turkish apathy, all of which are gone.

New order

Iraq’s oil industry has staged a comeback since the American invasion. After having left the market due to sanctions following its invasion of Kuwait, Iraq is now OPEC’s second-largest producer after Saudi Arabia, and the International Energy Agency says Iraqi output can nearly double by the end of the decade.

The insurgency, despite the oil fields’ general distance from the Sunni heartland, is in a position to hamper this recovery, and clearly sees in this a goal. The shutdown of Iraq’s largest oil refinery, in Baiji north of Baghdad, on Tuesday following an ISIS attack, was a strategic statement. However, the threat is to Iraq more than it is to oil markets.

Attacks on refineries, pipelines and seaports are about as far as ISIS can damage Iraq’s oil industry. It will not be able to actually take over the industry, due to its geography.

But more importantly, the global market has changed beyond recognition since Iraq’s invaded Kuwait.

On the supply side, Russia and the U.S. have become the world’s largest and third-largest producers respectively, and on the demand side, the U.S. has become more self-sufficient thanks to its shale mining. That is why, with all due respect to Iraqi oil’s recovery, its share of global production remains less than 4%.

And this is beside the fact that Iran could compensate for lost Iraqi exports, if allowed back into the market.

In short, as long as instability does not spill into Saudi Arabia, Kuwait, and the UAE, which produce between them nearly a fifth of the world’s oil output, Iraq’s turmoil is mainly its own problem.

In terms of oil, the important development is not ISIS’s gains, but the consequent Kurdish takeover of Kirkuk, where northern Iraq’s main oil fields sprawl. The Kurds had long aimed to become oil-thirsty Turkey’s suppliers. The problem was the government in Baghdad. Now ISIS, in its stupidity, has effectively helped its Kurdish enemies consolidate economically, and for good measure, have also stormed the Turkish consulate in Mosul.

The Kurds’ takeover of the northern oil is likely to be emulated in the south by the Shiites, for whom the fields near Iran, from Rumaylah to Abu Ghraib, will be an economic bloodline as they confront the Sunni challenge they face.

Ultimately, Iraq’s current turmoil can actually improve oil production, placing it in sectarian hands that will benefit most from its recovery, and secure it better than any foreign rule.

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